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If you have a client aged over 55 with an interest-only mortgage that they cannot repay, but can afford to continue with monthly payments, there are a range of solutions that could help them.
Some people choose to use their savings or downsize to repay the original mortgage. Some lenders will even extend the mortgage term. However, these options aren't possible or practical for everyone.
If your client wants to stay in the home they love, we have two key products that could be an option for them: the Retirement Interest Only Mortgage (RIO) and the Optional Payment Lifetime Mortgage (OPLM).
Download our factsheet for a more detailed breakdown
OPLM and RIO comparison factsheet PDF size: 1027KB
But which mortgage is right for your client?
Both products allow your clients to:
Release cash from their home.
Retain ownership of, and stay in their own home.
Enjoy fixed interest rates.
Repay the loan when the last borrower dies or moves out and into long-term care.
Take their mortgage with them when they move.
Make additional payments to reduce the amount they owe and the total amount of interest charged on the mortgage.
The differences
- A form of equity release secured against your client’s home.
- Clients can take a cash lump sum, or take the cash in smaller amounts as and when they need it - actual loan amount determined by age and property value.
- Clients can pay up to 100% of the interest each month. Minimum monthly payment of £25.
- Clients can stop making interest payments at any time, but they won’t be able to start them again.
- A residential mortgage secured against your client’s home.
- Clients can take a cash lump sum of up to 60% of the property value - the amount they can borrow is based on their affordability assessment.
- Clients pay off the interest of their loan each month.
- Clients must make monthly interest payments - as a last resort, your client’s home may be repossessed if they do not keep up with payments.
Need more help?
Talk to us. We’re committed to helping advisers understand the role that later life lending can play in helping clients achieve their financial objectives and a more colourful retirement.
If you have questions, get in touch with one of our experts.
Find out more
RIO
Our RIO homepage hosts a wealth of resources for advisers, including useful factsheets - and more.
Try our affordability calculator
See how much your client can borrow with our affordability calculator.
Why RIO? Interview with an adviser
We spoke to an experienced adviser to understand what kind of clients would benefit from a RIO, the importance of a fixed interest rate and how RIO compares to equity release.